Yesterday, Fed Chair Jerome Powell did a complete 180 on the Fed’s hawkishness. For 11 months straight Powell had maintained that the economy was booming and that the Fed would be hiking rates until the end of 2019.
Powell did this despite:
1) The entire Emerging Market space blowing up with many emerging stock markets crashing over 30%.
2) The clear evidence that Fed policy was destroying global growth with Copper and other economically sensitive bellwethers collapsing into bear markets.
3) The clear evidence that corporate profit margins peaked in 2Q18 and the business cycle was turning down in the US.
None of the above mattered to the Powell Red. Time and again Chair Powell ignored these issues during press conferences, speeches, and during Q&A sessions. Which is why his sudden decision to change course is not a good thing… in fact it’s very VERY bad.
Why?
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3 comments:
Housing is already taking a dive and ghettobury is still holding at a 9% foreclosure rate.
For those of us who read alt media sources, we knew the Fed could not continue its monetary tightening without destroying the global economy.
Many economists (who are NOT on tell-a-vision have rung the warning bells for a long time.
Consider for instance: LIBOR fix, COMEX fix, and stock buy backs by the big corporations. The US Dollar is worthless and deep down even regularly educated people know it.
Time to get out of US Dollar denominated assets!
Sell,sell,sell. So I can buy, buy, buy!!
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